 By Yihan (Bradley) Tian This past week has been one full of conflicting elements as reflected in the unstable market trends. As of Friday, May 15th, all three major indices have displayed a slight rebound from declines earlier this week. Market closed with S&P 500 up 0.39%, NASDAQ 0.79%, and the Dow 0.25%. A focal point during this past week has been the continuing China-US trade tension. Earlier this week, President Trump mentioned a likely blockade of semiconductor shipments to Huawei Technologies. China later responded with inclinations toward putting US firms on an ‘unreliable entity list’. Federal Reserve Chairman Jerome Powell rejected the possibility of deploying negative interest rates as a measure to further quantitative easing earlier this week. Regarding the economic outlook, Powell expresses uncertainty and predictions for a difficult, slow recovery. “The passage of time can turn liquidity problems into solvency problems,” Powell stated. The CBOE Volatility Index (VIX) surged as much as 13.97% this week, indicating increasing fearful sentiments towards May & June futures. On Friday it closed with a 2.21% decline. Investors are now shifting their attention from defensive sectors such as energy and financials to the technology and healthcare sectors, which has exhibited considerable resistance against the overall downturn this week. Specifically, optimistic predictions have been directed towards teleworking technologies and pharmaceuticals as they are significantly influencing the future as reopening proceeds. Source: Reuters, MarketWatch, Investing.com, Morningstar, University of Michigan, CBOE  By Yihan (Bradley) Tian
Today, the 2020 Berkshire Hathaway Annual Shareholders Meeting, commonly known as the largest investor gathering in the US, took place virtually without any physical attendants. During the meeting, CEO Warren Buffett shared his view on the status quo as well as on the future of the economy. Below are some noteworthy highlights: Buffett supported Jay Powell’s decision pertaining to the release of Federal stimulus, stating that Federal aid helped unfreeze the credit market and avert exacerbations of large-scale panic. Regarding the oil market: “when you got too much in storage it doesn’t work its way out of that fast.” Buffett predicts further declines in oil prices for the next few years. Buffett also emphasized the detriments in operating earning may persist throughout or even beyond 2020. “I don’t know the consequences of shutting down the American economy,” Buffett said. Despite currently bearish trends, Buffett believes in the intrinsic strength of the US economy and an eventual recovery back to its former liveliness. The full livestream can be found on Yahoo Finance: https://finance.yahoo.com/brklivestream/  By Yihan (Bradley) Tian
4/29: Stocks were lifted by the Fed’s commitment to act appropriately to protect the US economy from the Covid-19 recession, and by optimism that economies will recover as lockdowns are eased soon. The Dow has ended the day at 24,633 points, up 2.2% or 532 points. 4/30: Overnight, the Dow Jones Industrial Average lowered by 1.2%, NASDAQ Composite by 0.3%, and S&P 500 by 0.9%. Meanwhile, President Trump has announced inclinations toward new changes in the US’s traffic policies with China over concerns regarding the COVID-19 pandemic. Source: CNBC, Investing.com, The Guardian, Yahoo Finance |
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